With The Napster of Banking Round The Corner, Bring Out Your Popcorn

The real battle for the Internet and the tremendous changes it brings hasn’t even started yet. What we are seeing right now are some precursor skirmishes where the cronies (the copyright industry) of those in power are complaining and getting some breadcrumb favors.

One general rule of technical advancement is that it’s not necessarily the most feature rich variant of a new technology that reaches the tipping point and critical mass, or even the cheapest or most available: rather, it tends to be the easiest to use.

I frequently cite YouTube as an example here. It was not the first site to offer video over the net. Heck, porn had done that for five years when YouTube came around, and techies for ten years. There were at least a dozen common ways to share digitized audio and video online with one another.

History so far tells us that it takes about ten years from conception of a technology, or an application of technology, until somebody hits the magic recipe in how to make that technology easy enough to use that it catches on. And when it does, boy, does it catch on.

It would be rude to not mention Napster in this context. I started swapping files over FidoNet using a 2400-bps modem in 1989. Text, music, images. It was crude, but we were doing it. A new protocol called TCP/IP hit the shelves, and 1995-ish we all switched to that. Big deal, it was still packet switching. In 1999, Napster hit… and suddenly everybody was exchanging music files. DC++ and other follow-suits made sure that we would share anything we wanted.

It took ten years for music sharing to become easy enough to wildfire, courtesy of Napster. It took video sharing ten years to become easy enough to wildfire.

So if you want a crystal ball of the next battle, look at what many techies are doing right now, but that is obscure and hasn’t caught on; something that has a very clear and attractive use case once it becomes easy enough.

Here’s what’s on my radar: banking. There’s at least a dozen different variants of decentralized cryptographic currencies and transaction systems out there, very sophisticated and totally incomprehensible. There’s Ripple, BitCoin, ecash and others.

Just as BitTorrent made the copyright industry obsolete in the blink of an eye, these stand to make banks obsolete. These, or their successor, will hit a tipping point as soon as somebody makes it easy enough to use. The technology is there, the use case is there — there’s certainly no shortage of annoyance with big banking. It’s just a matter of usability now.

When this tipping point happens, there won’t be any central point of control over economies. It will be like everybody traded in cash, traditional anonymous cash, once again. Why, then, will this make governments dump a ton of bricks on the Internet?

Up until now, from the perspective of governments, it’s only been some friends complaining about a sales slump of CDs, so governments have given them some legislative breadcrumbs to shut up. How do you think governments across the world are going to react when they realize they’ve lost the ability to tax the public?

Imagine the ramifications of that for a moment. The governments of the world are on the brink of losing the ability to look into the economy of their citizens. They stand to lose the ability to seize assets, they stand to lose the ability to collect debts. No application of force in the world is going to help: everything is encrypted, and destroying a computer with any amount of police firepower will accomplish zilch.

All the world’s weapons in all the world’s police hands are useless against the public’s ability to keep their cryptographic economy to themselves. Won’t make a scratch.

If you thought the wars over knowledge and culture were intense, I believe we’ll see much more interesting events unfold in the coming decade. The decentralized, uncontrollable economy where one lifetime employment is no longer central to every human being is something I’ve called the swarm economy, and I predict it will redefine society to an immensely larger extent than the ability to get rap music for free.

Rick Falkvinge

Rick is the founder of the first Pirate Party and a low-altitude motorcycle pilot. He works as Head of Privacy at the no-log VPN provider Private Internet Access; with his other 40 hours, he's developing an enterprise grade bitcoin wallet and HR system for activism.

Discussion

With The Napster of Banking Round The Corner, Bring Out Your Popcorn http://ur1.ca/45886 #swarmeconomy #bitcoin

Mats Henricson

May 11, 2011

I don’t think Bitcoin (for example) necessary will remove the taxability of its citizens. A shop selling things can continue to be required to register with the government, and be required to run a controlled cash register (currently is the case in Sweden). Everything sold in that shop will have to go through that cash register, and this is the way governments can ask the shop for a percentage as tax, regsrdless if it is in SEK, USD or Bitcoins.

Both the shop and its customer can pay in cash (or Bitcoins) and skip the cash register, but that is not different from today.

What Bitcoin does is to make it possibly to be anonymous, i.e. noone can trace who bought that sweater in that shop. This is no different from today, just pay in cash. But Bitcoin also makes it possible to pay anynymously to anyone on the net, with no way for any government to stop that transaction. So, with Bitcoins you may in the future be able to fund Wikileaks without a trace, as if you handed them cash. Also, the transaction fee is much much smaller than todays use of credit or debit cards. So, I would be more worried if I owned stock in Visa or Mastercard. They will get under pressure.

Rick Falkvinge

May 11, 2011

I think you’re missing just how analogous this is to the copyright wars.

It is in both the employer’s and the employee’s interest to pay less income tax, and therefore underreport the actual salary. Before, this has been easy as pie for the government to discover, with essential economic death sentences for everybody involved as a result.

With these technologies, the government loses that insight. Income taxes will, for all practical purposes, become voluntary.

If you want an insight into how it might work, I suggest you look at any cash-heavy retailing with lots of wastage, like produce shops or bakeries. The tax authorities can put as much locks as they want on the formal system — when money is exchanged untraceably outside of it, that won’t matter.

So just as the copyright industry is a third party trying to prevent a mutually beneficial exchange, the tax authority is probably about to take that role. The futility will be just as apparent.

Now, this doesn’t mean that all taxing is impossible, but the tax structure would need to shift completely. Probably to something based on sales, corporate profits or on tangible, unhideable assets like land.

Mats Henricson

May 11, 2011

Why would it be in my interest to pay less income tax? Tax is the grease that makes society go around. It pays most our schools, roads, courts, defence and other things most people think are valuable.

I am extremely interested in Bitcoins, but not as a way to avoid paying taxes.

I agree that income tax may be a problem in the future, but sales tax can be collectible as always.

Rick Falkvinge

May 11, 2011

@Mats: I think there are a lot of people who seek to minimize how much they spend on taxes. You may not be one of them, but I would argue that most see taxes as something ranging from robbery to an unnecessary expense.

In any case, I don’t think it’s far-fetched to say that many enough will avoid paying taxes the second they are confident they can get away with it.

Deep Blue

May 11, 2011

I agree with Mats, taxes are necessary in order to maintain society itself, not to mention things like free healthcare and education and welfare, etc., important things I hope most of us support.

Maurício Gomes

May 11, 2011

@Mats

Unfortunately, that is not always true.

I am from Brazil, if I could not pay taxes, I would not pay them at all, plainly because right now the government do nothing for me, all my security, education, road construction, electricity, water, health services, all of that, I paid with my own money.

So if I could not pay the government, that currently to NOTHING for me, I would.

And I am not joking… I recognize that in some places taxes work, I would happily pay some taxes in some EU countries, like the ones in nordic lands, but here in Brazil, taxes only purpose is end in some politician underwear (and I am not joking, unfortunately… just look about “dinheiro na cuéca” on google…)

Rick Falkvinge

May 11, 2011

I am not arguing whether taxes are perceived as necessary.

I am saying that it will not be possible to tax the public.

When that is not possible, it doesn’t matter how many people think it must be done anyway.

ForFreedom

May 12, 2011

So where is your bitcoin address good sir? 😉

ForFreedom

May 12, 2011

“Why would it be in my interest to pay less income tax? Tax is the grease that makes society go around. It pays most our schools, roads, courts, defence and other things most people think are valuable.”

That’s exactly the point! With Bitcoin you can _choose_ to pay your taxes – I doubt anybody is going to refuse to take it if that’s what you’re worried about 😉 The central point is that the governments lose the ability to _force_ you to pay so they actually need to do good job and persuade you that they’re worthy of your money as opposed to sending armed thugs to your door and throwing you in jail if you do not pay.

I would pay my “taxes” to things I believe in and support – schools, roads, other infrastructure etc. I _woudn’t_ pay for corrupt inside deals, rights abusing politicians and bureaucracy that goes with it and so on. Right now you’re forced to take is as a package, if you want to support new infrastructure you need to fund the corruption too – not so with Bitcoin and voluntary taxes 😉 wonderful thing, isn’t it?

As an anarchist I can only hope you’re right and taxes become unenforceable, because I’ve got a feeling that, when all is said and done, you’ll find there’s a LOT more free-riders than supporters of the state might like to admit. I’ll be the first to stop surrendering my hard-earned income to those fascists.

Scary Devil Monastery

May 17, 2011

@Mats

In theory everyone agrees that taxes are a necessity for society to provide health care, road management, and other vital parts of the infrastructure.

In practise however, you should realize that very few people, given the option of avoiding paying 30-50% of their net incomes would voluntarily do so. Greed or simple thrift are two main reasons for this…but even among more politically enlightened people, i can say that there would be a great deal of motivation to avoid paying the salary for the EU bureaucracy or for certain Ministers and so on.

If a political party today can guarantee a 100 euro less taxed per month, that party stands a very good chance of crushing the opposition altogether. No matter how “enlightened” the country in question is.

Until now, patents have been enforceable largely as a result of the low transaction costs involved when a handful of oligopoly producers in a given industry (who’ve often exchanged or pooled the patents) market a limited number of models of goods through mass-distribution retail chains. What happens when a garage micromanufacturer produces knockoffs of patented mass-production goods — much like the Shanzhai job shops today running knockoffs on the third shift, but with only 10k worth of homebrew CNC machinery that can be bought for three or four months’ factory wages?

What happens when the unemployed and underemployed start taking advantage of the technical possibilities for low-overhead household microenterprise, in defiance of zoning and licensing and bogus “safety” and “health” standards whose real purpose is to impose artificially high capitalization and overhead costs and make it impossible to stay in business without a suffiicent revenue stream to amortize them? Say hello to household microbakeries using ordinary kitchen ovens, homebased cab services using the family car, household daycare and beauty salons, raw milk and meat from animals without RFID chips, etc., all bartering with each other and with those garage manufacturers in an encrypted darknet economy.

The biggest effect of file-sharing was to destroy all the artificial scarcity rents of the content owners and cause an entire sector of the economy to implode to marginal reproduction cost. As Chris Anderson said, atoms also want to be free — they’re just not as pushy about it.

It seems like lots of people are willing to pay taxes voluntarily – in fact, people who disagree with the government taking their money by force tend to give more to private charity (article here: http://online.wsj.com/article/SB10001424052748704774604576036010174911064.html ), suggesting that people’s objections to government tend to revolve around not bring bossed around rather than selfishness. A non-capitalist sector of some sort is clearly necessary – some people who clearly don’t deserve to die cannot produce through no fault of their own, public and common goods (the environment, education, the roads, information goods like books, software and media) need to be produced, protected and/or maintained, and so on, and our current solution to this problem is taxes (or, in the last case, restrictive copyright), but I think we’ll find more decentralized and voluntary solutions to more and more of these as time goes by.

BUGHUNTER

June 13, 2011

sorry for OT – but where exactly do you get free health care? In which countries?
Thanks!

Rick Falkvinge

May 11, 2011

I saw a comment on Facebook that was interesting. While the BitCoin money supply is still slowly increasing, the exchange rate towards the USD has changed fivefold in BitCoin’s favor lately.

Government is in the process of making all anonymous payments illegal. We will see laws making all forms of anonymous electronic cash punishable with very stiff sentences. (Akin to how forgers have been dealt with historically.)

It is just as easy to build electronic cash systems that trace every transaction and reports it to the government. There is simply no way that any government will let go of the fiscal control. Unlike the copyright industry, the government has direct access to violence and there are virtually no limits to how much violence will be applied if there is a large scale threat to the tax base.

Not even the United States would let this one pass under the radar for long.

Scary Devil Monastery

May 17, 2011

Just as with the copyright monopoly there simply isn’t a way to enforce such a system however. When upholding or enforcing the current system of taxation costs more overhead than you stand to gain from enforcing that system, the system breaks. It’s that simple.

The internet makes a global system of barter economy possible, rendering vast amounts of labour completely impossible to tax. A simple shift away from a central currency is a definite possibility for rather large portions of the market.

Michael Pettersson

May 11, 2011

Income tax isn’t really necessary, government income is but there are other ways they can finance their spendings if needed. If it become infeasible to tax people’s income, I guess that governmental monopoly’s of infrastructure and some industry could replace the loss. There are also the possibility to tax physical assets, like the house you live in, your car etc.

“@Falkvinge: Napster of Banking Round The Corner http://t.co/E8UGpLC” => it’s more that banking at stake, it’s the CURRENCY as we know it..

M.A

May 11, 2011

@Mats&Deep Blue:

Oh, you bunch of poor obsolete and outdated statist saps. No, taxes are NOT ” necessary in order to maintain society itself” anymore than cancer is ” necessary in order to maintain life itself”. Taxes are nothing more than what the great 19th century political philosopher Frederic Bastiat called “legal plunder”. They are nothing more than an overglorified armed robbery by an overglorified mafia. ALL the things like “schools, roads, courts, defence and other things most people think are valuable” can be EASILY done WITHOUT resorting to legal plunder, if enough people they are valuable. If you think they cannot exist without a group of bureaucrats robbing the populace to maintain them, then they are probably not as valuable to society as your crocodilian statist brains may think they are. What is valuable is PURELY SUBJECTIVE. And of course, the fact that someone thinks there is such a thing as “free healthcare and education and welfare” is a dead giveaway of the person’s abysmal economic illiteracy. NOTHING in economics is “free”. To call that which is sponsored by legal plunder “free” is nothing more than Orwellian doublespeak.
Of course, if you want to continue sponsoring your beloved mafia, go right ahead, nobody will stop you. Things like Bitcoin will make the process of funding the things which you values as necessary voluntary, as opposed to the unethical and antisocial way they are(many of which aren’t even necessary) currently being funded, but please keep the dirty tentacles of it away from everyone else’s lives, you bunch of statist eleutherophobic drones.

Tommy Stormstereo

May 11, 2011

And there we have a person who’ve read Atlas Shrugged 193 times.

Karellen

May 11, 2011

It’s an interesting idea, but I think you’ve got a selection bias in that you’re looking at what has taken off and working back. Just because something is technically useful, possible and working (awkwardly) now, I don’t think that’s a guide to what will be commonplace 10 years down the line. Otherwise everyone would have been using end-to-end encrypted email since 2001, 10 years after PGP was first released in 1991. We’re 20 years on from that now, and still only a tiny proportion of email is encrypted, or even signed.

Rick Falkvinge

May 11, 2011

It’s a matter of perceived value. What is the added value of encrypted mail over normal mail to your average Joe? I’d say it’s negative — it’s a layer of added hassle, with very little or no visible gain at all.

When it comes to banking, the gains are in easy-to-grasp numbers. That’s a different story, the use case is quite clear.

ForFreedom

May 12, 2011

I think you’re mixing up two different principles … in mail the encryption is an end goal – simply to have your mail encrypted. In Bitcoin, it’s just a _means_ to an end. That’s a big difference. The average Joe doesn’t have to care that it’s cryptography under the hood of Bitcoin just like most people do not care to understand the BitTorrent protocol. The thing that matters to him though is that he can safely transfer digital cash without any third party doing the middle man and spying, restricting and charging you fees for it.

THAT’S the breakthrough use-case – not the cryptography itself.

Björn Persson

May 13, 2011

No, email encryption is also a means to an end. The end goal is to be able to safely communicate without any third party spying on and restricting your communication. The difference – if Rick is right – is that only a small percentage of people see a value in keeping their communication secret, but just about everybody see a value in hiding their money from the government.

But on a related note, if people don’t protect their communication it won’t matter how anonymous the digital cash itself is. It will still be possible to track all the transactions by snooping on the communication and reading all the orders, confirmations, invoices and receipts that are being exchanged. It won’t be quite as convenient as getting a report from the bank, but with the mass surveillance systems that are being built now, I think it will be feasible.

With The Napster of Banking Round The Corner, Bring Out Your Popcorn – Falkvinge on Infopolicy http://t.co/O2zj2o1

Magnus

May 12, 2011

And to all this you can add stationary “RepRap” 8 meters high and 100 meters long able to “print” in whatever material up to the size of a car. (yea, highly standardized and fully automated factories taking “print jobs”) Just like print on demand taken to where it logically will lead in the future.

I believe in the free unfiltered flow of information, as implemented by computers connected to the internet. But, mostly for safety purposes, government still has to control physical objects. For example, I don’t want my neighbour to be able to build an atomic bomb in his house. The privacy aspect of controlling physical objects can probably be achieved with enough technology. For example, the government can send robots to scan houses or vehicles for things like bombs, and if the robot determines that the contents violate certain conditions, the owner is told he must fix it somehow or face some kind of consequences. The robot however doesn’t send any data back to other people, so privacy can be achieved like this. The robots can also be used to evaluate taxes for physical objects, and the owner must pay or face certain consequences. Therefore, with an unfiltered and private internet, the government will lose their ability to tax services involving only the transfer of data, but the taxing of activities that create or move physical objects can still be implemented.

Scary Devil Monastery

May 18, 2011

That would be difficult like you wouldn’t believe. You can build a potent bomb literally out of the contents of your cleaning or kitchen cupboards, or your gardening sheds. In order to forcibly culture hazardous bacteria on a large scale you don’t really need advanced equipment either, and the raw substrate is dirst cheap.

And so on etc.

The sum and gist is that you can not ever “secure” people with knowledge from building dangerous devices unless you impose restrictions on obtainable hardware which isn’t feasible to implement in practice.

Also, government can make money by taxing land, taxing each internet subscriber, taxing each person that uses the public roads, airports, any use of a public place, businesses with a physical location,…

You’re probably looking for the right thing but in the wrong direction, then again the point of your post is that everyone probably is so why should yourself be an exception. 😉

My theory is that it will come through the medical database evolution. Information in general is the new currency, already more important to governments than old fashioned money. Point in case – the EU now hands over absolutely everything they know about their own citizens to the USA to pay for data mining driven military protection, where the physical side in turn is paid for by loaning trillions of billions of units of old fashioned money they’ll never be able to repay (the Chinese) anyway.

At the same time, on the John Doe slash Joe Schmo health care level of society, the tech evolution is heading to a one patient one journal thing, currently mostly at accessible online from anywhere if you can just state your social security number, but in its next generation to be carried around on your body, i.e if your bus crashes in the mountains and you survive but are unconscious any local hick doctor will still be able to read your whole life’s medical history by accessing a chip.

I’m not talking about carrying around a USB-device or having it on a phone or any other external device, I’m talking about a chip so small it will be implanted in your body, probably under one of your fingernails or toenails or a central body bone structure piece. The tech basically already exist.

That will be your “health care information wallet” slash “health care credit card” and simple capitalist logic says that it won’t be able to stop. Every level of society will save old fashioned money from it. The consumers will want it, the security of caring it around will protect you ten times over compared to not to. The medical professions will want it, why take more tests than you need to and lower profits. The insurance companies will want it, why sign up anyone with a hidden risk factor in the past or present when you don’t have to. The governments and their security organs will want it, because full information about their citizens are worth more to them than old fashioned money.

But whatever it will look like (let’s say it’s a chip under your fingernail, just for the argument) that “information wallet” will become much, much more down the line. Why settle for your medical history when you can carry you electronic money around the same way? All that’s needed from there is a killer app that allows people to drop money to each other anonymously the same way an old fashioned dollar bill can be given to a waiter for appreciation outside government control, or any kind of small micro payments like that greasing the bigger system so that it keeps working despite government clogging.

Interesting discussion. But what if governments made legal protection only apply to old-fashioned currencies? Let’s say that you and some other person agrees that you will work for him and earn X bitcoins an hour. If the government made it impossible to legally enforce such a contract and the other person could cheat you on your money, wouldn’t that serve to partially undermine such an alternative currency?

There is still a possibility that market players manage to establish themselves in such a system by building up a network of trust of course (somewhat akin to PayPal which seems to be free to confiscate accounts on quite loose grounds but cannot do so too often or it would undermine the public’s trust too much). This trust argument would of course also apply to individuals.

It was quite a leap to go from the Napster to Unregulated banking. Unfortunately there was no explanation as to how you made the leap and what these new “revelutionary” services actually do.

Magnus

May 13, 2011

The leap is not that big since money basically is an IOU = a piece of information, then it is all about decentralization and P2P and thus quite similar to filesharing.

Peter Andersson

May 14, 2011

+1 for putting that much into one single sentence!

Someone once explained money to me as froozen time. The time you work to earn the money is then “froozen” in a currency state form so that you later on can use that froozen time to pay others for their time and/or stuff.

I think the real shift going on here isn’t that governments won’t be able to collect tax — people with guns can always collect tax. The real shift is that the cartels controlling the issuance of currency in each country will begin to lose their power over the direction of economic activity. A decision to issue currency is fundamentally a decision about what ought to be of value, and when we let a centralized committee make that decision for us, we lose power over our own lives and become subservient to them.

With regard to taxation, I agree that taxing income is increasingly not tenable or enforceable, in which case taxation would move to consumption of resources that it is easy for the collective administration, whatever it may be, to control.

Ideally income would be taxed at zero, and consumption of energy, natural resources and public infrastructure like roads at whatever level is required to fund democratically agreed programmes,

Some form of public currency and banking would always be needed though, but competition with private schemes like ripple would be healthy.

ANNM

May 14, 2011

Doesn’t every bitcoin (or fraction thereof) contain the entire history of all transactions it has been used in? Doesn’t that potentially make it very easy to track, unless you change your address all the time?

Björn Persson

May 14, 2011

I only just started reading about Bitcoin, but as I understand it the software automatically generates new addresses for you all the time.

Don

May 15, 2011

Yes, Annim,

That’s true. While there is no real-world name associated with any particular bitcoin, digital details of wallet addresses and transactions are available, and this means that it is, in theory, possible to do traffic analysis to identify real-world bitcoin users. Of course, people who know what they are doing can make it very difficult to do traffic analysis on their bitcoin transactions, but that brings us back to Rick’s point about the digital currency being “easy-to-use.”

We need a system that will do for digital currencies what BitTorrent did for media file sharing.

This is just silly. Falkvinge still has no real grasp on how copyright works and now he starts dabbling in banking principles. Good luck on your flight Rick, though I fear you will crash land once again.

Scary Devil Monastery

May 17, 2011

And yet another troll decides to insert a nonfactual one-liner.

A few facts to present here: BitCoin actually works. Microtransactions actually work. Barter economy has been proven workable in online communities. None of it taxable in any real meaning of the word.

If you have any relevant arguments as to why Rick would be wrong in his assessments, by all means bring it to the table.

Until then let’s just assume that you have nothing to add to the debate.

Bonk!

May 17, 2011

Scary why are you so desperate to defend Rick? I think I know…
As for BitCoin it is somewhat interesting but in no way can BC be compared to Napster. BC will never blow up among pirates or others as it requires honesty and transparency. And face it honesty is not high on the list for most pirates and potential BC users…

Scary Devil Monastery

May 18, 2011

I’m not “desperate” to defend anything in particular. Rick can do that much himself.

I do, however, have an unquenchable urge to squash illiterate idiots who bring nothing other to the table than the old “He can’t possibly be right because he never is. I just said so”.

If you can somehow see your way to raising your argumentation above that of a five year old in a sandbox then we can talk about the potential problems.

Here’s a fact though. “Pirates” – by the definition “filesharers” – have continually been proven by every serious study to be a big market group which tends to spend hard cash on their interest to a far greater extent than the “non-filesharing John Doe”. That’s gone so far as to be irreefutable fact today.

And lo surprise – guess which group of citizens actually tends to use services such as PayPal, and other online donating services? Who invented Flattr?
And in what circles do you think BitCoin is actually gaining a user base?

Your reliance on straw man arguments and circular logic is what turns you into nothing more than a childish troll.

Bonk!

May 23, 2011

Scary, funny that you mention Flattr which in most parts does not work and probably never will work in the scale it needs to achieve anything.

“That’s gone so far as to be irreefutable fact today.”

Hahaha! you really believe in fairytales.

Bitcoin is used by so few that a centrally located restaurant turnover more money.

bruces Bruce Sterlinghttp://is.gd/JMJO57 *Honcho of Pirate Party thinks BitCoin is great, so that’ll be peachy, then

Sovereign Curtis

May 17, 2011

“I agree with Mats, taxes are necessary in order to maintain society itself, not to mention things like free healthcare and education and welfare, etc., important things I hope most of us support.”

LOL, taxing other people = free stuff for you, huh? Typical parasite.

I do NOT support the use of initiatory violence in order to ‘solve’ societies ‘problems’. I think that is incredibly uncivilized, and IMMORAL. If YOU want something, YOU need to go create value you can trade for what you want. Stop looking to The State to solve YOUR problems by holding a GUN to your NEIGHBOR’S head.

“In theory everyone agrees that taxes are a necessity for society”

No, not even in theory does everyone agree. I think society would be MUCH better off without taxation and the immoral State it supports.

I work to encourage the emergence of the VOLUNTARY society.
Screw your violent, parasitic, ‘civilized’ society.

@malcolm8 got a few transactions to start trying this out – thanks for RT! I don’t think ppl realize the disruptiveness http://is.gd/JMJO57

Werner

May 18, 2011

There is no chance a goverment will allow losing control over money. No chance in hell. If it becomes big enough to even show on a radar, it will get banned and any use will be severely punished. Maybe even special laws if it gets big enough.

Instead will we see the abolishment of cash and anonymous payments, all in the name of safety for not handling with cash, and in the name of anti-tax evation/money laundering.

And I hope, hope, hope I am wrong.

Scary Devil Monastery

May 19, 2011

To some extent they already have. If a Monaco-based advertising company charges for webpage advertising, who taxes the income generated by the 200.000 hits generated by French viewers? In the world of online gaming and communities virtual items do have a solid value, backed by the fact that they take several hours of spent time obtaining. How do you tax those transactions?

“Currency” in itself is nothing more than an IOU – a promissory note of some sort. *Thanks to the internet we are in fact looking at those IOU’s being in the form of barter, of eyeball time, in one effort exchanged for another.

And there’s absolutely nothing which prevents such a system from becoming standard practice. Huge online games such as World of Warcraft have de facto already become solid economies in their own right, with virtual gold and items being linked directly to real-world currency exchange rates. As soon as virtual currencies become convenient enough to use, they will be. And the fact that a lot of transactions are virtually untaxable more or less guarantees it.

As Rick had it, it isn’t really in the interests of either side in a transaction to voluntarily accept taxation. This being the case, if there is an alternative which offers that option then that alternative will be used.

Governments certainly will attempt to block such a migration by almost any means necessary. But i can’t see any real possibility to do so. Not as long as the internet even exists. If you can communicate data at all there is always a way to keep that data secure and obfuscated.

Of course. This is what will happen! It´s the natural path in the evolution of money. The bankers will not be in control forever. I´ve been talking about this for years now.

The virtual currency revoltion is already in the making! Give it 10 years or so and currencies will come about just like open source software today. This is a protocoll that most likely will be used – http://metacurrency.org/blog/2009/05/12/metacurrency-and-cyclos-clarifications-open- . It is a web language for currencies, in the making, just as smtp for e-mail or HTML for browsers. When this is in place. Everyone will be able to create they´re own money systems and use them in an integrated way among each other.

To all the people who can not imagine a different world where legal theft(taxes) is not necessary.

Why don’t you pretend for yourselves that this could perhaps be a good thing, read some Rothbard and then look at the real possibilities for activism to bring the peaceful society about, for example agorism http://www.agorism.info/

You might see the worlds problems in a totally different light afterwards.

Elmo

June 8, 2011

The general problem is that everyone who proposes a political alternative assumes that the transition from our current system to the new one will suddenly make all human beings nice and considerate. No matter if you are talking about Marxism, Anarcho-Syndicalism or Anarcho-Capitalism, no system works if you assume that a number of its members based on a simple Gauss-curve are complete assholes (as unfortunately seems to be the case, empirically). If you assume that everyone is trying to be as nice as possible and somehow get along with everyone else, any system could work, even national states + capitalism. Of course, our present system has the disadvantage that the positions of power in both state and capital seem to exert a stronger attraction on people of worse (more selfish) character…

The other main argument against Anarcho-Capitalism is this: If you refute taxes on the basis that your money and possessions are rightfully yours and anyone taking them from you is immoral, how do you enter a stating of morally righteous ownership of anything? You cannot. There is simply no logically sound reasoning for why any person should have the right to own anything. Of course you can argue that whatever work you put into something makes it yours, but the land and resources you use for anything you make or do will always have been usurped at some point by a simple act of assumption. Anything you can own, no matter whom you got it from, will have started its career as a possession when someone simply claimed it as their own. There is absolutely no way in which transition through a historical chain of ownership legitimizes this act of assumption, and thus there is no moral reasoning which protects any possession against an act of assumption from anyone else at any later point in time.

I am sorry if this has been mentioned in the comments before: The idea that governments will lose their ability to tax people is a scenario that will only happen if they fail to legislate against it. Even if the Bitcoin network itself was impenetrable (I do not see why governments could not easily pretend to be merchants and subsequently bust their trading partners – as companies do in p2p filesharing), the access to Bitcoins could be restricted: If governments actually fear for their power, they will make it mandatory for communications-devices to include hardware which lets the authorities spy on the user. Of course there will be an outcry, but as long as the majority of people is more afraid of terrorists and pedophiles than of their own government they will get away with it. Advances in cryptography which seriously endanger the current system of national states are as dangerous to civil liberties as they are to centralized government: one of the two general outcomes is not the abolition of taxes but a ban of all communications devices which are not directly monitored by the government.

[…] degree, bad behavior in the pursuit of profit can be met with a lawsuit, but if indeed the world is moving towards an unregulatable, irreversible currency such as Bitcoin, we can’t rely on reactionary, punitive measures to put a band-aid on this problem; it needs […]

I don’t think bitmoney will be as revolutionary as u all hope, but feel free to prove me wrong.

Maybe i’m asking the same question as someone else but isnt the use of money on internet in general something that we do much because of trust towards each other. The state is a general provider of that trust. We know that we can trust the money because of us being able to take legal action if we are robbed.

Thus, to make such a currency effective without the state behind us we have to find a way to recreate trust in society. Right?

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